Construction, Forestry and Maritime Employees Union v Opal Packaging Australia Pty Ltd
[2024] FWC 1064
•17 MAY 2024
| [2024] FWC 1064 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry and Maritime Employees Union
v
Opal Packaging Australia Pty Ltd
(C2023/6373)
| DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 17 MAY 2024 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
The Construction, Forestry and Maritime Employees Union (CFMEU) is an employee organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth). Opal Packaging Australia Pty Ltd (Opal Packaging) is a company operating a business, which manufactures and distributes a variety of packing products, including at its B9 Machine site in Matraville in New South Wales. Opal Packaging is part of a larger paper and packaging business operated through numerous corporate entities, all ultimately owned by the Nippon Paper Group – one of the world’s largest pulp and paper manufacturing companies. The CFMEU and Opal Packaging are in dispute about personal/carer’s leave entitlements of some CFMEU members covered by the Opal Paper Botany – B9 Machine – Enterprise Agreement 2022 (2022 Agreement) who are full-time employees of Opal Packaging (Affected Employees).[1] The CFMEU was a bargaining representative for the 2022 Agreement and is covered by it.[2] On 20 October 2023, the CFMEU applied under s 739 of the Fair Work Act 2009 (Cth) (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure found in clause 11 of the 2022 Agreement.
It is uncontroversial that from 1 May 2020 until 10 September 2023, the Affected Employees “accrued 86 hours of personal leave per annum” in Opal Packaging’s payroll system.[3] Opal Packaging informed Affected Employees and the CFMEU that it identified what it considered to be “an error in the configuration of personal leave accruals in the payroll system”.[4] Opal Packaging informed the CFMEU that it believed “personal leave should accrue based on 84 hours per annum and that it intended to update its [payroll system] accordingly”.[5] Following discussions with Affected Employees and the CFMEU about its proposed change, Opal Packaging implemented a payroll system change resulting in Affected Employees accruing “personal leave based on 84 hours per annum” from 11 September 2023 onwards.[6]
The CFMEU disputes Opal Packaging’s approach to the accrual and deduction of personal/carer’s leave arising from its payroll system change[7] and asserts that the CFMEU’s attempts to resolve the dispute with Opal Packaging between 20 June 2023 to 26 September 2023 were unsuccessful.[8] It is not in dispute, and I am satisfied the CFMEU took steps to resolve the dispute by discussions at the workplace pursuant to clause 11 of the 2022 Agreement. The dispute was not resolved at the conference conducted by the Commission and the parties were content for the dispute to be determined by arbitration on the papers.
The question to be determined is as follows: “Are full-time employees of the Respondent who work the rostered hours of work in Clause 14.2(c) of the [2022 Agreement] entitled to accrue 84 or 86 hours of personal/carer’s leave per annum?”[9]
The CFMEU contends that the Affected Employees are entitled to 86 hours of personal/carer’s leave per year under clause 34(d) of the 2022 Agreement, which is extracted further below.[10] It contends that an Affected Employee accrued “86 hours of personal leave per year” between the date the 2022 Agreement commenced operation (17 October 2022) until 16 June 2023,[11] when Opal Packaging wrote to the CFMEU indicating its intention to reduce the yearly accrual of Affected Employees to 84 hours per year.[12] The CFMEU contends that an Affected Employee, covered by the 2022 Agreement or its predecessor, the Orora Paper Botany – B9 Machine – Enterprise Agreement 2019, “accrued 86 hours per year of personal leave” at least between May 2020 until 10 September 2023.[13]
The CFMEU says that clause 34(d) of the 2022 Agreement provides a separate entitlement to Affected Employees of 86 hours of personal/carer’s leave per year,[14] claiming that clause 34(d) of the 2022 Agreement “refers not to ordinary hours of work, but to rostered hours of work”.[15] It argues that rostered hours of work are set out in clause 14.2 of the 2022 Agreement and include an average of 42 ordinary hours per week plus 48 training hours per year.[16] The CFMEU contends that this results in rostered hours of work averaging 43 hours per week.[17]
Opal Packaging contends that the inclusion of the phrase “subject to and taken in accordance with the Act” in clause 34(a) of the Agreement operates so that the types of leave referred to in clause 34 (except for annual leave due to the inclusion of “[e]xcept as provided by [34](c) below”) are wholly governed by the Act.[18] Opal Packaging contends that the judgment in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU)[19] has informed its approach. [20]
Opal Packaging says that on a proper construction of sub-clauses 14.2(c)(i), 28(d)(i) and 28(e) of the 2022 Agreement, an Affected Employee’s rostered ordinary hours are 42 hours per week,[21] “training hours do not form part of ordinary hours”,[22] training hours are therefore “not relevant to calculate annual personal leave accruals”,[23] and that personal/carer’s leave annually accrues at 84 hours of personal leave per annum (42 x 2).[24] Opal Packaging contends that an Affected Employee has, in total, 42.9 average rostered hours of work.[25] It says that the proper construction of the Agreement requires an Affected Employee’s personal/carer’s leave entitlement to be regulated by the National Employment Standards (NES).[26]
The resolution of the dispute turns on the proper construction of the 2022 Agreement. The principles applicable to construing an enterprise agreement are not in dispute and may be briefly stated. The task of construing an industrial instrument begins with a consideration of the ordinary meaning of the words, read in context, and taking into account the evident purpose of the provisions or expressions being construed. Relevant context will include other provisions of the industrial instrument, read as a whole, and the disputed provision’s place and arrangement in the instrument. The statutory framework under which the industrial instrument is made, or in which it operates, may also provide relevant context, as might an antecedent instrument or instruments from which a particular provision has been derived. Regard may be had to relevant context and surrounding circumstances to determine whether there is any ambiguity in a provision of an industrial instrument. The language of an industrial instrument is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end, and a consideration of the language contained in the text of the relevant parts of the instrument remains the starting point and the end point in the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.[27]
Turning then to the text of the 2022 Agreement, clause 5(d) of the 2022 Agreement relevantly provides guidance on the interpretation of the Agreement and the NES as follows:
“This Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between this agreement and the NES, and the NES provides a greater benefit to an employee, the NES provision will apply to the extent of the inconsistency.”
Clause 5(d) of the 2022 Agreement operates as an NES precedence provision giving supremacy to the NES where there is inconsistency as between the 2022 Agreement and the NES and the NES provides a greater benefit to an employee covered by the 2022 Agreement, including Affected Employees. It also operates to overcome any concern that one or more terms of the 2022 Agreement might contravene s 55 of the Act. The clause also plainly contemplates that terms in the 2022 Agreement may be more beneficial than counterpart terms in the NES. This possibility is also contemplated by s 55(4)(b), which permits an enterprise agreement to include terms that supplement the NES – to supplement means to add to something else in order to complete or enhance it.
Clause 34 of the 2022 Agreement relevantly provides as follows:
“34 Leave – Statutory Entitlements
(a) Except as provided by (c) below, annual leave, personal leave, parental leave, compassionate leave and community service leave will be subject to and taken in accordance with the Act.
(b) For the purposes of this clause, a “continuous shift worker” is a seven day shift worker who is regularly rostered to work on Sundays and public holidays.
(c) In relation to annual leave for continuous shift workers;
(i) In addition to the 5 weeks (210 hours) of annual leave accrued on ordinary hours in accordance with the Act, employees will accrue an addition (sic) 90 hours of annual leave per annum.
(ii) Consequently, total annual leave accruals will be based on 300 hours of annual leave per annum, which is equivalent to 25 shifts of 12 ordinary hours.
(iii) For the avoidance of doubt, annual leave taken will deducted on an hour for hour basis.
(d) 10 days personal / carer’s leave per annum (which, when working a roster averaging 43 hours per week, will be 86 hours per year); and
(e) 3 days paid compassionate leave”
Opal Packaging contends that the term “subject to” in clause 34(a) of the 2022 Agreement has “a usual meaning”, namely “regulated by” or “governed by”.[28] In the result, it says that all leave types to which reference is made in clause 34(a) are “wholly governed or regulated by” the Act, except in relation to annual leave for continuous shifts workers because of the carve-out - “[e]xcept as provided by [34](c)”.[29] If that were correct, the words “and taken in accordance with” the Act which immediately follow would be superfluous. Read in context the term “subject to” means “affected by”. The words “[e]xcept as provided by (c)” in clause 34(a) indicate that the additional 90 hours of leave for which clause 34(c) provides will not be affected by or taken in accordance with the Act. It does not accrue “on ordinary hours in accordance with the Act” because those hours are 210 per annum. The 90 additional hours are not part of the entitlement in s 87(1) of the Act and because the additional hours of annual leave are not an NES entitlement, the strictures governing NES accrued leave do not apply.[30] This is to be contrasted with other additional entitlements for which clause 34 provides, which are, by reason of clause 34(a), subject to and taken in accordance with the Act.
That this is so, is consistent with the entitlement to 3 days of compassionate leave for which clause 34(e) of the 2022 Agreement provides. Section 104 of the Act provides for an entitlement of 2 days of compassionate leave. Opal Packaging’s contention that this is an example of “infelicitous” drafting[31] is rejected. It does not satisfactorily explain why that is so. Moreover, this is not a case of careless expression. Instead, clause 34(e) clearly sets out a quantified entitlement to a number of days compassionate leave. The entitlement to the number of compassionate days of leave is determined by the 2022 Agreement, but it is affected by and taken in accordance with the Act.
Opal Packaging’s contention that the inclusion of the phrase “Statutory Entitlements” in clause 34 of the 2022 Agreement supports a conclusion that the leave entitlements are to be regulated by statute[32] is also rejected. The phrase “Statutory Entitlements” appears in the heading to clause 34, not the text. Headings are notoriously apt to mislead a reader about the content and meaning of the substantive provision. A case in point – clause 34(c)(i) plainly provides an entitlement greater than the statutory entitlement to annual leave. It provides: “[i]n addition to the 5 weeks (210 hours) of annual leave accrued on ordinary hours in accordance with the Act, employees will accrue an addition (sic) 90 hours of annual leave per annum”.
Personal/carer’s leave for which the 2022 Agreement provides is therefore affected by and taken in accordance with the Act.
Clause 34(d) of the 2022 Agreement sets out that an employee’s personal / carer’s leave entitlement per annum is 10 days. The words in brackets convert the 10 days entitlement into hours for employees working a roster averaging 43 hours per week. The inclusion of the modal auxiliary verb “will” clearly sets out that 86 hours of personal/carer’s per year shall be the personal/carer’s leave entitlement of an employee working a roster averaging 43 hours per week under clause 34(d). And so, an Affected Employee working a roster averaging 43 hours per week becomes entitled to 86 hours of personal/carer’s leave per year. This entitlement is affected by and to be taken in accordance with the Act. It is affected by the accrual rules in s 96(2) and the payment rules in s 99. It is also affected by the cashing out rule in s 100, in respect of which provision is made in clause 37 of the 2022 Agreement. The taking of leave rules in accordance with which personal/carer’s leave is to be taken are found in s 97.
The conversion of 10 days personal/carer’s leave to 86 hours per year is not dependant on working a particular number of ordinary hours per week. Instead, the 86 hours of personal/carer’s leave per year applies to an employee “working a roster averaging 43 hours per week”. The entitlement thus hinges on the working hours rostered. There is no basis, as Opal Packaging would have it, to read “working a roster averaging 43 hours per week” as working a roster averaging “43 ordinary hours per week” (emphasis added).[33] The entitlement is conditioned on working the specified number of “hours rostered” and clause 14.2(c) discussed further below, contemplates rostered hours of work which exceed 42 ordinary hours.
Clause 14.2 of the 2022 Agreement deals with hours of work and provides:
“14.2 Hours of work
(a) The ordinary hours for day workers (that is an employee who is not a shift worker) will be within the spread of hours from 6.30am to 6.00pm.
(b) For the purpose of the shift roster arrangements;
(i) Day shift will be a shift finishing after 8am and before midnight; and
(ii) Night shift will be a shift finishing subsequent to midnight and before 8am.
(c) The rostered hours of work will be:
(i) Ordinary hours: an average of 42 hours per week over a 12 month period; and;
(ii) Training time: 48 hours per year as referred to in Clause 26.2.
(d) The rates of pay set out in this Agreement include amounts in respect of shift penalties. For that reason, the provisions of the Award relating to shift work arrangements and payments are excluded from incorporation.”
Clause 26.2 of the 2022 Agreement provides:
“26.2 Training days allocation in annualised salary structure
(a) The employees’ annualised salary includes compensation to provide each employee with 48 hours of training per annum. These days will be rostered by Opal and employees will be required to attend.
(b) The nature of the training will be determined by Opal after discussion with employees and may include team development and off-the-job skills training. The training will:
(i)meet legal obligations;
(ii)be meaningful;
(iii)contribute to the business;
(iv)create team culture.
(c) Opal will provide the Consultative Committee representatives a 48 Hour Training Plan for the following calendar year in Q4 of each year for feedback from employees on the content and preferred scheduling of the training hours. The 48 Hour Training Plan may be subject to change to reflect business needs.
(d) Where practical, Opal will endeavour to conduct all training at the Botany worksite. In the event that training is required off-site there will be consultation with the affected crew regarding appropriate local providers. Training days at the mill will be combined with wash-ups when possible to reduce travel time for employees.”
All Affected Employees are said to work the roster set out in clause 14.2(c) of the 2022 Agreement.[34] Clause 14.2(c) of the 2022 Agreement sets out the weekly rostered hours of work as 42 ordinary hours plus 48 training hours per year. Clause 26.2(a) makes clear that training days will be rostered by Opal Packaging and employees will be required to attend. In the result, Affected Employees working such a roster work on average 43.02 hours per week[35], which when rounded down is an average of 43 hours per week.
Clause 34(d) of the 2022 Agreement is in terms clear. It provides for an entitlement of personal/carer’s leave of 86 hours per year for employees working rostered hours averaging 43 per week. The requirement to work rostered hours averaging 43 per week correlates with clauses 14.2(c) and 26.2(a) which sets out how hours of work will be rostered. Opal Packaging does not grapple with the text of clause 34(d). It does not satisfactorily explain why the numeral “43” is used to denote the average number of rostered hours in a week which are to be worked in order to engage with the annual 86 hours entitlement in clause 34(d). Its contention that the inclusion of the numeral “43” is merely an illustrative example[36] is not persuasive, much like the earlier discussed infelicitous drafting contention. Its contention that the Affected Employees do not work an average of 43 hours per week and that this is merely an “arbitrary figure”[37] is also rejected. As the discussion at [21] above shows, rostering hours in accordance with clause 14.2(c) results in the Affected Employees clearly working an average of 43 hours per week. The inclusion of “43” is not arbitrary. It is part of the fabric of the 2022 Agreement.
Clause 34(d) of the 2022 Agreement supplements the NES entitlement to personal/carer’s leave for employees working the roster configuration described. The absence of words such as “in addition to” (c/f clause 34(c)) is not material when the provision is read in context. The words used are themselves clear and clause 34(e) also plainly supplements the NES compassionate leave entitlement but is not introduced with the words “in addition to”.
Conclusion
The answer to the question posed is “86 hours of personal/carer’s leave per annum”.
The dispute is determined accordingly.
DEPUTY PRESIDENT
Hearing details:
Matter determined on the papers
Written submissions:
Applicant, 24 January 2024
Respondent, 14 February 2024 and 23 February 2024
[1] CFMEU’s F10 under question 2.1
[2] See Opal Packaging Australia Pty Ltd T/A Opal Paper & Recycling[2022] FWCA 3510 at [4]
[3] Statement of agreed facts at [11]
[4] Ibid at [12]
[5] Ibid
[6] Ibid at [13]
[7] CFMEU’s outline of submissions dated 24 January 2024 at [8]
[8] CFMEU’s F10 under question 2.2
[9] Directions of 6 December 2023; Varied directions of 19 January 2024
[10] CFMEU’s F10 under question 2.1; CFMEU’s outline of submissions dated 24 January 2024 at [2]-[3]
[11] CFMEU’s F10 under question 2.1
[12] Ibid
[13] CFMEU’s outline of submissions dated 24 January 2024 at [5]
[14] Ibid at [2]-[3]
[15] CFMEU’s F10 under question 2.1
[16] Ibid
[17] Ibid
[18] Opal Packaging’s position statement; Opal Packaging’s outline of submissions dated 14 February 2024 at [13]
[19] [2019] FCAFC 138
[20] Opal Packaging’s position statement
[21] Ibid
[22] Ibid
[23] Ibid
[24] Ibid; Opal Packaging’s outline of submissions dated 14 February 2024 at [5]
[25] Opal Packaging’s outline of submissions dated 14 February 2024 at [3]
[26] Ibid at [6]
[27] Australian Workers’ Union v Orica Australia Pty Ltd[2022] FWCFB 90 at [18] and the authorities referred to therein; see also James Cook University v Ridd [2020] FCAFC 123, (2020) 278 FCR 566 at [65] and the authorities referred to therein; Workpac Pty Ltd v Skene (2018) 264 FCR 536, (2018) 264 FCR 536 at [197]
[28] Opal Packaging’s outline of submissions dated 14 February 2024 at [10]
[29] Ibid at [13]
[30] See Re TasTAFE[2024] FWCA 464 at [86]
[31] Opal Packaging’s outline of submissions in response dated 23 February 2024 at [2.5]
[32] Opal Packaging’s outline of submissions dated 14 February 2024 at [9]
[33] Ibid at paragraph [17]
[34] CFMEU’s outline of submissions dated 24 January 2024 at [15]
[35] (((52.1428571-5) x 42) + 48)/(52.1428571-5) = 43.01818181910743
[36] Opal Packaging’s outline of submissions dated 14 February 2024 at [17]
[37] Ibid at [17.4]-[17.5]
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